<b>Gold Prices</b> End Lower; $1400 Still Eyed

NEW YORK (TheStreet) -- Gold prices fizzled out Friday with trading influenced by a stronger dollar and profit-taking.

Gold for December delivery lost $5.60 to $1,372 an ounce at the Comex division of the New York Mercantile Exchange. The metal traded as high as $1,386.40 and as low as $1,362.70 during Friday's session, but the price was falling double digits after the Comex closed.

The U.S. dollar index was adding 0.65% to $77.04 while the euro was falling 0.88% to $1.39 vs. the dollar. The spot gold price Friday was falling $14.90, according to Kitco's gold index.

Gold prices were retreating despite the fact that Federal Reserve Chairman Ben Bernanke in a speech Friday gave the green light for more monetary easing. Bernanke said inflation "can be too low" and that "overall economic growth is less vigorous than we would like," but investors didn't learn anything new and no dollar amount was put on any accommodative measures.

Further supporting Bernanke's argument was the fact that the core Consumer Price Index for September was unchanged. Bernanke said that the Fed's next steps will be dictated by economic data and that a lack of inflation in September will certainly support the thesis that more money printing is needed.

Bernanke did say that the Fed will proceed with caution, leaving some question marks about how much money the Fed will inject into the system. Bernanke also said the economy should grow more quickly in 2011, which in turn raised the question of how long the Fed's monetary easing will last. Bernanke said that the Fed is already outlining an exit strategy to put a cap on quantitative easing and to make sure that inflation doesn't surge out of control.

His cautionary tone crimped gold's rally along with profit-taking as investors booked gains after gold's monster rally this week and on the heels of options expiration.

However, most analysts predict that gold prices should head higher in the short term amid the backdrop of monetary easing. George Gero, senior vice president and financial consultant RBC Capital Markets Global Futures, said that "buyers appear from everywhere at the first sign of profit-taking as currency weaknesses are hedged to maintain purchasing power."

With gold prices still eyeing $1,400 an ounce, the question remains just how high can the metal go?

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